Retail sales to likely to be less impacted in December 2021

Retail sales in the United Kingdom will certainly feel the pinch of Omicron-laden repercussions in the present month, but the impact of rising Covid cases on the volume of retail sales is likely to remain less as the upbeat consumption and spending ahead and during Christmas holidays, followed by expends before year-ender vacations are expected to counterbalance the low-to-moderate contraction due to resurgence of infections linked to the new variant.
Given the highly volatile environment, subsequent to the emergence of the Omicron variant on a large scale, the shoppers are set to put a brake on frequent outings, effectively reducing the quantum of spends as the government has already reimposed the mask mandate, along with some precautionary social distancing measures and is now looking forward to reintroducing a slew of other reciprocatory guidelines that can collectively help in bringing down the boiling number of Covid cases associated with Omicron and Delta variants.
Almost all businesses from various sectors have anticipated a sharp revival in the sales volume in the terminal quarter of 2021, as the Downing Street administration allowed all the commercial settings to reopen and resume the operations at the maximum possible level, a move intended to push the business closer to the pre-Covid volumes before the onset of new year 2022.
A large section of small-to-medium scale enterprises operating within the retail segment were already grappling with the operative hurdles including the long delays in deliveries due to disrupted supply chain and logistics networks as in-house supply chain, as well as third party vendors struggled with a massive shortage of heavy goods vehicle (HGV) drivers and the people who can oversee some of the critical functions within the networks.
Other than the malfunctioned supply chain, businesses were not able to rehire or employ new faces, typically the skilled workers who can manage essential operations within the businesses, at a time when the number of vacancies continue to mount new record highs. As a result of industry-wide dearth of skilled human capital, a large section of cash-rich corporations started extending signing bonuses as a part of their regular onboarding programme.
Alongside these, the ever-rising rate of inflation continued to increase the procurement costs for businesses as the limitedness of raw materials was already there, the higher costs of importing or buying certain components furthered the pain for manufacturers. Subsequent to this, the country has witnessed month-on-month increases in the factory-gate prices. With the higher price of finished goods, the sellers and retailers were forced to pass on the burden of increased prices to the consumers, in order to retain the profitability margins.
The aftereffect of rising prices of some essential, as well as non-essential products was not seen in November of 2021 as consumer spending witnessed a sharp upsurge due to the discounts and lucrative deals around Black Friday. According to the early estimates by the Office for National Statistics (ONS), the retail sales volume surged by 1.4% in November of 2021, effectively beating the street estimates.
The retail sales volumes in the UK stand 7.2% higher as compared to the pre-Covid levels of February 2020. Surprisingly, the overall volumes of retail sales managed to keep up the rising momentum, at a time when the proportion of retail sales through online mediums slipped to the lowest level since the onset of the pandemic. In November 2021, the proportion of online retail sales decreased to 26.9%, it is well below the record high proportion of 36.8% recorded in February of 2021, the second month of third national lockdown.
The proportion of online sales is likely to rise in December as Omicron will unequivocally spike the reluctance amidst the individuals with the variant continuing supersede the so-called maximum level of protection obtained from two-dose regimen, supplemented by the third jab in the booster programme.
The online sales have apparently reduced as people have progressively stepped out of their homes after the government eased all the restrictions, allowing all the business settings to resume operations. The proportion of sales recognised through online mediums stood at 22.6% in March of 2020, the month that witnessed the first national lockdown in the UK.

About Lisa Baker, Editor 2359 Articles
Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.